Ofcom tells BT to buck up on unbundling

Ofcom all but congratulated BT yesterday for progress the telco has made since 2005, but said it still had more work to do with Openreach - the division which wholesales BT lines for comms providers. The regulator was reporting back on BT's performance since signing a statement of undertakings in 2005.

The regulator welcomed a fall in average broadband prices - since 2005 prices are down two thirds. In the UK 60 per cent of consumers can now choose between four or more providers and over 10m now use a telecoms provider apart from BT. Five per cent more consumers switched broadband providers than in 2005.

BT's Openreach launched as an independent business in January 2006. It offers wholesale local loop products to communications providers including BT's own retail business.

Ofcom congratulated BT on its progress, but now wants Openreach to offer compensation when it fails to meet agreed service targets.

The regulator is proposing new requirements on Openreach, which would mean it would be obliged to pay out if service or quality fell below a contractual threshold, with continuing pay-outs if problems persisted. BT would also have to pay double the current compensation for failing to activate lines.

Openreach would have to pay compensation proactively, too - consumers would not have to make a complaint to receive compo.

BT said it was glad its progress had been recognised. "Openreach is dedicated to improving customer service regardless of this consultation and service levels have in fact been improving considerably in recent months," it said.

"Doing well for our customers is our prime motivation and these proposals actually look very similar to those we've already offered. The consultation is a long and complex document however and so we'll respond in full over time."

Ofcom's consultation closes 25 January 2008. Their full statement is here. ®